Arena Minerals Secures Option Agreement with B2Gold

Arena Minerals (TSXV:AN) reported that it has entered a binding agreement with B2Gold Corp (TSX:BTO) for B2Gold to acquire up to a 60 percent interest in the Pampa Paciencia and Cerro Barco properties. The properties comprise a portion of Arena’s Atacama copper project in Chile.

In order to exercise the option and acquire a 60% interest in the Property, B2Gold will be required to spend a minimum of US$20.5 million on the Property over a five year period, and make payments of US$630,000 to Sociedad Quimica y Minera de Chile S.A. (“SQM”), the underlying property owner, on behalf of Arena over a three year period. In addition, B2Gold will make payments of US$2.5 million directly to Arena over a three year period as further set out below.

Further outlining the agreement, the release stated:

Arena’s interest in the Property is currently subject to an underlying option agreement (the “Underlying Option Agreement”) to acquire up to an 80% interest in the Property, entered into among Arena, its wholly-owned Chilean subsidiary and SQM. Following the reduction schedule set out in the Underlying Option Agreement, the Property shall be reduced to 10,000 hectares by July 27th, 2016.

Pursuant to the terms of the Letter Agreement, B2Gold will have the option to acquire a 50% undivided interest in the Property (the “First Option”) over a three year period by: (i) making a non-refundable cash payment of US$50,000 to Arena upon entering into the Letter Agreement (paid on February 20, 2015); (ii) making additional payments in cash or in common shares of B2Gold, or any combination thereof to Arena in the aggregate amount of US$2,450,000 payable over three years; (iii) by making aggregate per hectare payments in cash or in common shares of B2Gold to SQM in the amount of US$630,000, payable over three years; and (iv) undertaking certain exploration and development work on the Property in the amount of US$5,500,000 over a period of three years.

Upon completion by B2Gold of its obligations under the First Option on or before July 26, 2017, Arena shall exercise its right to acquire the Property pursuant to the Underlying Option Agreement and Arena and B2Gold shall establish a joint venture company which will hold an 80% interest in the Property through a special purpose vehicle to be formed in Chile. Upon satisfaction of the First Option, B2Gold would hold a 62.5% interest in the special purpose vehicle, with Arena holding the remaining 37.5% interest.

Arena president and CEO, Will Randall, said:

[W]e are pleased to be partnering with B2Gold on the Cerro Barco and Pampa Paciencia prospects. Not only does this agreement bring a very strong technical team with extensive experience in Chile, it will also meet all of Arena’s work commitments for the entire Atacama copper project through to option completion. The total land position to be joint ventured represents approximately 20% of the Atacama land position, giving Arena the flexibility to pursue further transactions on the remaining 80% of the Atacama copper project. This strategy will allow for larger work programs on more aggressive timelines, increasing the potential for value creation while minimizing the dilution to Arena shareholders.

Click here to read the Arena Minerals (TSXV:AN) press release